So you have decided to take a leap and start a new business despite this COVID-19 pandemic and lockdowns everywhere.
Congratulations! This might feel risky and overwhelming, but as the saying goes, “Fortune favours the bold.”
Nowadays, opportunities for new entrepreneurs are better than they have ever been before.
You can grow your business from scratch to a successful small, medium, or large business that has the potential to become an empire. A business is a rewarding opportunity to achieve work-life balance while pursuing your passions.
But it isn’t easy and the first few years are the toughest.
However, if you are diligent when starting your business, you will put yourself in a much better position for success.
To help, here are is a guide for you about how to start a small business in the UK in 2021.
1. Define your vision
A business without a clear vision is like a ship without a sail. Describing your business’s vision sets everything else in motion. Designing a mission and vision statements should serve as the foundation for your vision.
In a few paragraphs, identify your business goals and the high-level strategies you will use to accomplish those goals.
When writing your vision, be as concise and clear as possible.
Also, make sure you include a compelling and motivational message that inspires you to work towards your goal.
2. Register as a self-employed
Even if you have been on PAYE before, you must notify HMRC as soon as possible after you become self-employed. You can register for self-assessment here.
You will now be confirmed as a sole trader. Yet, you may benefit from having a different business structure.
3. Choose the right business structure
The most crucial element in a business plan before starting a business is to decide on the ideal appropriate legal structure.
Deciding on the appropriate legal structure from the very beginning will determine how you pay your taxes and the digital reporting of these taxes, which is crucial if you do not want to face any legal penalties.
There are a variety of business structures in the UK,
- Sole trader
- Limited liability partnership (LLP)
- Limited company
- Not-for-profit organization
- Community Interest Company (CIC)
You will need to choose the option that most closely fits your company’s structure.
4. Choose a business name
If you have decided to work as a sole trader, then you can just use your own name if you wish.
You will need an address for registering your UK business for joining the company register and tax purposes. Only limited companies required to register their name, though others can register as a trademark to stop anyone else from trading under the same name.
If you’re setting up a limited liability company, you must appoint atlast one director. Work out your shares and shareholders, have a registered office address, write your company’s memorandum and articles of association, open a business bank account, and register for the corporation tax.
Make sure that your selected name is available by searching online in the Companies House website, especially. Use their Web Check service to ensure that your name is not already in use.
5. Set up the business insurance
Before your business performs any work, you must have proper business insurance in place.
If you employ people, you must by law have the employers’ liability insurance and likewise, if your business uses vehicles, then you must have the commercial motor insurance.
And depending upon the business nature and type, you may also need to have:
- Public liability insurance
- Professional indemnity insurance
- Commercial property insurance
- Key person insurance
6. Ensure compliance
Your business must be completely compliant – that is, it must conform to all relevant legislation covering your area of activities.
Your business may also need some licences or permits to carry out certain activities. You can find which licences you may need using this licence finder at Gov.UK.
7. Set your business premises
Select where your business will be based – in commercial premises or at your home.
If you decide to rent or buy premises, you may have to pay business rates. Renting a business property also involves several tenant responsibilities.
If you choose to work from your home, then you may need to obtain special permissions and/or insurance. Find out more at Gov. UK.
8. Prepare your team
When should you hire employees? Many business owners would answer, ‘When you have no alternative.’
Taking on permanent employees is a major undertaking, so explore all other alternatives first. You can use freelancers, sub-contractors or agency staff initially until it becomes clear that the permanent role makes commercial sense.
As an employer, you must:
- Pay at least a minimum wage
- Enroll all eligible employees in the workplace pension scheme
- Have employer’s liability insurance
- Provide statutory minimum paid holiday & sick pay
- Provide paid maternity, paternity & adoption leave
These are only several of your responsibilities towards your employees.
An accountant in your team can help you with these key responsibilities such as setting up your payroll, employment contracts and employer National Insurance contributions.
There’s a lot to consider when you’re starting your own small business.
The information above will give you a complete guide and help get you started on the road to owning a successful business.
Getting started is the harder part. So, brainstorm your unique idea, research it thoroughly, and implement your plan slowly but surely.
Then direct your employees to help you stay on task by rewarding them for being more productive by specific milestones.
But be patient, success does not happen overnight. Consistently work on your business, and you will see the result.